CONVERSION FROM INDEX TO REALITY

Obama’s call for “TRUTH” is a simplified statement that calls into question the manner in which information is collected, the way it is presented and the manner in which it is disseminated to the public. 

Underlying this simple call for integrity is his assessment that information flow is fundamentally flawed and that a much needed correction will result in smarter policies that people will give credence to and lend their active support; and that the self-fulfilling negative prophecy we are all living can be turned into a positive climb in quality of life. If you already believe this and understand it, there is no need for you to read this article. If you think his statement is mere lofty rhetoric, you might want to consider my presentation here. For those who want further information, look for books by Von MIses and Rothbard.

The tools of power are all based in information. If the information seems reliable, then the policies foisted on us seem reasonable and even “right.” The basic tool in use today is the statistical index. There is something about an index that when published gains the credulity of the public and even those who know better. It is like a self-fulfilling prophecy.

American political and economic history can be viewed from many perspectives and themes. One of them is the ebb and flow of our collective perception of people, regarded sometimes as labor, sometimes as capital and sometimes not at all. 

The current business, economic and political environment has failed to advance or evolve very much for most of the people of the United States, even though women received the right to vote some 80 years ago, and blacks received the right to vote some 40 years ago. 

The tendency of certain people to accumulate great wealth and power in any society of any nature inevitably produces an inequality not only of results, but of opportunity. American voters, deprived of the education and information they need to know to make informed decisions, are easily manipulated into voting against their own interests.  An educated voter is a nightmare to any power broker, economic cartel, or political cartel.

When adults cannot find states, cities or even continents on a map displaying all the information with proper labeling, it is not hard to see how such people can be easily deceived. And those with power and wealth are eager to deceive them, gaming the electoral process into a utility to maintain and expand their wealth and their power.

The tools of power are all based in information. If the information seems reliable, then the policies foisted on us seem reasonable and even “right.” The basic tool in use today is the statistical index. There is something about an index that when published gains the credulity of the public and even those who know better. It is like a self-fulfilling prophecy. 

Whether it is Libor, the inter-bank lending rate index, the CPI, which supposedly measures inflation for consumers, or the indexes used to measure market dominance, we have drawn artificial lines in the sand which allow those in power to continue on their merry way while the rest of us wonder what hit us. 

• The reality is that Libor, bond ratings, measurements of consumer prices, measurements of those employed, measurements of those unemployed, measurements of those underemployed, productivity, and unfair trade practices are all at substantial variance with reality. Thus the mortgage meltdown, the recession, and another opening of Walmart that kills thousands of jobs, hundreds of companies, thousands of opportunities for innovation, and diminishes our choices to dangerous or inferior products with virtually no service inside the store and no assurances of fair treatment once a sale has been completed. 
• Walmart is able to achieve this feat and become one of the largest companies in the world by converting labor back into capital despite the 13th Amendment. As with all companies of great wealth they were able to purchase the rights to make their activities legal. In reality, those of us who live in the world created by this cash carry government policy making, we see that there is complete 100% market dominance by Walmart in each town it hits. 
• But statisticians for Walmart just like the statisticians for the drug companies, look for a sampling that gives them the arguable position that what we see right in front of us, just isn’t there. We are deceived, or so they say. We are not looking at the “big picture.” True, nor should we look at THEIR big picture if we want OUR lives improved. There should be a healthy competition between accumulation of wealth and quality of life. In truth, we are at the bottom of the barrel on the level of that all-important competitive “index.”
• By expanding and contracting the area “affected” by a Walmart store one can present a plausible argument that there is no significant effect on competition. We know different but there it is right there in black and white, by the numbers. 
• By contracting the sampling on a drug study to a specific period of time where nothing adverse happened to patients taking the experimental drug, the drug is pronounced safe and then tens of thousands of people die because it wasn’t safe, as the REST of the data clearly showed. Management of disinformation is the way we are manipulated into voting against ourselves. Political slogans emanate from false statements from apparently reliable sources. And we are all deceived.
• By hiring all graduates of regulatory agencies when they retire, a retailer or drug or oil company guarantees that the regulators will not look too deeply into the manner in which such an index is presented. Plausible deniability is the name of the game. The result is you and I get screwed. That is the story of antitrust, the FDA, and dozens of other agencies serving the business sector  to the nearly complete exclusion of the safety and welfare of the taxpayers in whose name they operate. It is the equivalent of a hostile takeover of government where the cash and carry system of legislation perpetuates not merely inequality but threats to the safety and welfare of our citizens.

“Inequality” (regardless of how you define the word “equal”) does and will exist in the most despotic regimes following ideology from Marx to Plato’s progeny producing the likes of John Locke and the scholars of the American Revolution. No regime can provide or assure a specific outcome for the life of one or any of its citizens. This article takes no issue with the inevitability of inequality.

Yet we have an innate sense of right and wrong even when we do wrong. We know that “all men are created equal” has a meaning even if we can’t all agree precisely what that means. We know that the U.S. Constitution was written to provide a framework for liberty and freedom but not for women, native Americans and slaves. Women and native Americans counted as zero and black slaves pulled slightly ahead of women at 3/5 of a person, as stated in our constitution. 

When the American Slaves were freed about 160 years ago it was, in an economic sense, a conversion of capital into labor. 

Slaves had been purchased and traded like bales of cotton or rice or tobacco; they were property, they were allowed no education, no free will, and of course no bargaining power. How would anyone go about “educating” a bale of cotton? It makes no sense. While mystics ascribe a soul to everything, whether we think it is alive or not not, most of us are quite tolerant at denying rights to a bale of cotton, even if it is burned, torn apart are thrown under a bus. In a word, if the cotton “feels” anything, we don’t care and it isn’t likely that we will care anytime soon or that we should. Something in most of us “knows” that the cotton is not worthy of our sympathy, nor do we sense any obligation to it.

The system made perfect economic sense: the cost of production was reduced to the absolute minimum, repairs of equipment and “other capital” (like slaves) were repaired until they were of no further use at which point they were discarded. And unlike other forms of capital, slaves reproduced, thus continually expanding the potential for production without further capital expenditures. 

Society organized around this system in such a way that no actual person worked, without being regarded as disgraced. Plantations were worked by slaves, managed by slaves and the wealth generated went exclusively to the Plantation owner. The threat of removing this system, depriving the owners of their possession of slave capital was a threat to the entire way of life that had evolved over 200 years. 

It makes sense only if you look at some data and not look at other information. The slave capital system was missing a key ingredient — a prospering rising middle class. The non-slave states had it and they did far better in the long run than any of the slave states many of which are still, 160 years alter, at the bottom of the barrel economically and in quality of life. Their resistance to allowing education to a significant population of former slaves was the equivalent of shooting themselves in the head.  It was an all or nothing mentality. Either the slaves would provide free production or we won’t help them do anything. 

The “information” Southerners were working with was that blacks were less than human. They thus deprived themselves of the single greatest resource they had to compete in a national economy and eventually internationally. Politicians looking for power found it easy pickings to tease voters into anger and resentment about the Civil War, about slavery, and about Jim Crow segregation. The politicians objectives were simple: maintain power. The rest of the people be damned. (which at the risk of political incorrectness, makes the Reverend Wright’s comment plausible, even if ill-constructed. He wasn’t wrong in what he said. Yet he missed an important point: 40-160 years ago he would have been tortured and hung for making a statement that passed only as a news story now).

The importing of tens of millions of Mexican laborers who had “illegal” status is an inevitable result of big business’ realization that the lock on the poor white and poor black populations was loosening. The grip of fear of discovery gave the leverage needed to convert these workers from labor to something as close to slave capital as would be tolerated in our society.

The mortgaging of America’s future, with all the inevitable taxes that implies, the culture of debt rather than savings, and the withholding and diminishment of education through all walks of life in America is the policy behind the tools of our re-enslavement. The risk now is higher and more widespread than in the 1790’s when women, slaves and native Americans were already discounted capital. Now the government and the business sector have us all targeted as potential “capital” instead of unhappy black men caught like animals and transported like capital with acceptable losses at 1/3 of the cargo. 

And the only thing that can stop them is a reversal of the institutionalization of ignorance. We have accepted too long the notion that we don’t know anything but that’s OK nobody else does either. We should all know more than we do, We should all treat life as an opportunity to educate, train and better ourselves. If we do, then everyone wins, including the business sector which needs the rising prosperous middle class to do business, whether it is here or abroad. Why don’t they know that? Because like you, they are just people trying to get the most they can right now. That’s human nature. That is the American way.

Treat every index with suspicion. Test all information against your own anecdotal experience. And don’t let anyone tell you they know more about your life than you do.

Today we have a bill pending that stops the meltdown. It is a courageous and creative step that protects all parties. It requires YOUR input, so pass this along to as many other people as you can. This is much more than a step in the right direction. It would be nice to see support from the presidential contenders as well.

Write your congressmen and women and get this thing passed. The Senate and House are standing on the line between mayhem and an orderly society and have taken the right steps. The rest is up to you.

It isn’t perfect, but the bill would do more to stem the tide of foreclosures, evictions and declining home prices than anything else on the table. It will protect your home equity, it will stabilize the economy, and it will give the U.S. dollar just the shot of confidence it needs to slow the rising threat of hyper-inflation.

Call and write your congressman/woman, call and write your senators, flood them with emails.

This is not about the morality of or ideology of whether it was more the fault of one group over another. This is about the practicality of holding our society together. Nothing is more important to the your lifestyle than this bill no matter who you are.

Mortgage Aid Plan Advances in House

CLINTON — MCCAIN FORECLOSURE FREEZE GETS COLD SHOULDER BUT SOUNDS GOOD

Well here is a version (SEE ARTICLE BELOW) of what we have been pushing for months —- changing the terms of the mortgages so that the homeowner can stay in the house and the mortgage can be modified, sold or recast for capital accounting. This is a lot more sophisticated than the “mortgage freeze” proposed by Clinton and McCain and it is working already so we can’t dispute the success.

• The problem with a “mortgage foreclosure freeze” is that it is a sound bite that doesn’t really mean anything — like the gas tax holiday. It doesn’t address any of the problems but it gives rise to the illusion that the homeonwer is getting some relief.
• The problem for Obama is that he sounds like he is against providing relief because he understands the nuances of how to get that relief — without pandering for votes. People don’t like nuance and don’t have the time for complex answers. So they vote against themselves based on sound bites, hoping gas prices will go down (they won’t) and that their house will be saved by just doing one thing like a freeze on foreclosures that lasts ninety days (that won’t work either).

There is no Clinton-McCain plan for relief because no order, legislation or rule is pending that will freeze anything and nothing is pending. Hillary and John are just blathering. They haven’t ACTUALLY proposed the plan by introducing a bill on the Senate floor. The plan of these pandering politicians is get elected (the people be damned): the method is to make use of time-honored sound bites that consist of misleading statements and outright lies. The truth is that neither McCain nor Clinton has a clue about gas prices or mortgages.

Although this trading of mortgage obligations is obviously providing some relief, it doesn’t address the root cause of the mortgage meltdown. And much as I don’t care for the people or their methods who perpetrated this fraud on the world, there is no REAL solution unless some value is restored to the balance sheet of financial institutions and investors who purchased the collateralized mortgage obligations. Thus combining attributes of this plan with a more comprehensive plan to restore the capital reserves of financial institutions and investors would be preferable.

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HOUSING

Investors move in to save broken mortgages

By E. Scott Reckard
Los Angeles Times Staff Writer

May 1, 2008

Jared Lanning, struggling to pay a home loan on which he owed more than his house was worth, was thinking he might just let the lender take back the property. Then he got a call one evening from an Orange County investor who had bought his mortgage.

“I want out of your loan,” said the investor, Evan Gentry, chief executive of G8 Capital of Ladera Ranch, who offered to lower the balance and the interest rate.

Lanning, a crane operator in Englewood, Colo., was skeptical. A phone pitch, after all, had led to his getting the unaffordable loan in the first place. But Gentry was legit: He helped Lanning get a new Federal Housing Administration-insured mortgage — with a $12,000 lower balance. Gentry also paid $5,000 in closing costs for the new loan. Lanning’s new monthly payment is $200 less than before.

Investors — including big fish like former Countrywide Financial Corp. President Stanford Kurland as well as smaller fry like Gentry — are buying loans on the cheap from lenders who want them off their books. By paying less than face value for the mortgages, the new holders can modify loan terms, including shrinking the amount owed, and still make money.

With some economists projecting 2 million foreclosures this year, legislators and regulators are hoping to encourage wide use of this model. They want lenders and investors in mortgage bonds to mark down what borrowers owe and then provide them with lower-cost loans. It’s a tricky business: No one wants to be seen as bailing out speculative buyers or imprudent lenders, but they also don’t want mass foreclosures to devastate neighborhoods and the economy.

The Federal Deposit Insurance Corp. described the problem Wednesday as “a self-reinforcing cycle of default, foreclosure, home price declines and mortgage credit contraction, the likes of which we have not experienced since the 1930s.” The agency is proposing that the government lend $50 billion to 1 million borrowers to help them replace unaffordable loans.

Sub-prime mortgages with interest rates ratcheting higher have proved less of a problem than once feared, because interest rates overall have dropped. But a “toxic combination” of falling home prices and borrowers who can’t afford even the initial low rates on adjustable loans is now the issue, FDIC Chairwoman Sheila C. Bair said in an interview this week.

“Many more borrowers are under water,” she said. “And many more are just walking away.”

Many people bought homes with nothing-down loans at the peak of the housing boom — 29% of all buyers in 2007 made no down payments, Treasury Secretary Henry S. Paulson Jr. said recently. Others have sucked all their equity out of their properties with refinancings.

According to Moody’s Economy.com, some 8.8 million Americans — more than 10% of all homeowners — owe more than their houses are worth, although a Mortgage Bankers Assn. economist contended the figure was lower, perhaps 8%. In any case, there is wide agreement that many of those troubled borrowers have proved surprisingly ready to abandon their properties, even when lenders offer to modify their loan terms as they were encouraged to do by the Bush administration.

“We are working with borrowers to keep them in their homes, but a lot of them really don’t want to stay,” said Babette Heimbuch, chairwoman of FirstFed Financial Corp. of Los Angeles, a savings and loan operator that specialized in adjustable-rate mortgages, including many that were made without full documentation of borrowers’ incomes.

FirstFed has about $6.3 billion in loans on its books. It said that $667 million of that balance, more than 10%, was delinquent or in foreclosure as of March 31, up from just $46 million a year earlier. FirstFed said Wednesday that it lost $69.8 million, or $5.11 a share, during the first quarter this year compared with a profit of $8.4 million, or 61 cents, a year earlier. It set aside $150.3 million for loan losses during the quarter, up from $3.8 million during the first quarter of 2007.

Because FirstFed kept most of its loans on its books rather than selling them, it should have been easier for the company to work with borrowers to modify the loans. Heimbuch said FirstFed forecloses only after analyzing 10 other options to offer the borrower, including lowering the interest rate; changing to a five-year, fixed-rate loan requiring payment of interest only; and writing down the loan balance.

Still, she said, up to 50% of borrowers who miss payments don’t respond to letters and repeated telephone calls to see if something can be worked out.

Some customers had acquired second mortgages and couldn’t make new arrangements with the other lender, she said. “I think some know they told us the wrong income and are afraid to come clean, though we would still work with them . . . to keep them in their homes if possible.”

For struggling borrowers, it’s a big mistake not to return such calls these days, said Gus A. Altazurra, a veteran mortgage executive who recently raised $10 million from private investors to buy and modify loans for which homeowners are still making payments.

“They’re probably going to help you, given the current situation,” said Altazurra, whose Irvine-based Vertical Fund Group has been negotiating with lenders of all sizes to buy loans. He said “a flood” of mortgages went up for sale in April after lenders closed their books on a horrendous first quarter.

Altazurra, who has paid as little as 31 cents on the dollar for some loans, said the terms of some mortgages made at the peak of the boom were hard to believe. One loan he bought from a Texas bank was to a borrower with a very low credit score — 484 — who refinanced and cashed out 100% of the equity in the property, he said.

Gentry, the other Orange County loan buyer, said he had obtained commitments from investors to provide $100 million in capital for workouts on loans that have stopped paying, current loans that can no longer be sold and foreclosed properties. He has bought nearly $50 million in mortgages and property so far.

Gentry purchased Lanning’s loan in a pool of mortgages from a San Diego lender that was going out of business. He said that on average his private venture was paying 70 cents to 80 cents on the dollar for loans like Lanning’s that were still current, and “less if the loans are nonperforming.”

Lanning had no home equity left — and thus had little incentive to keep sacrificing to make payments — before he got the smaller, cheaper FHA loan. Now his outlook has changed.

“We can’t do anything frivolous now,” he said. “But if we do it right, we have enough. That other loan was just pushing us over the top.”

I would give credit for the term “moral constipation” but I can’t remember where I heard it. I invite all who read this to give me the creator’s name so I can correct this blog and give him the attribution he deserves. 

It appears that we can all agree on one thing regardless of which candidate, party or ideology we subscribe to — The United States of America is on a path of moral bankruptcy, where ethical concerns and choices between right and wrong have been shoved off the table and instead convenience and self-aggrandizement is accepted by “we the people” with far more tolerance than is acceptable to me.

There is practically nothing so dear to me as my own opinion of my own intelligence. And yet I am dumfounded by the lack of outrage as corporate America and Government join hands in our pockets, in our lives, in our families, and in our minds. Protests erupt about the Olympic flame — but where is the outrage, the “I’m mad as hell and I won’t take it anymore” about the following:

1. Diesel fuel is $4 per gallon here but across the border in Mexico it is $2. Anyone care?
2. Real inflation for the Average American is in excess of 15% and climbing. Anyone interested?
3. Exxon made $11 billion last quarter. The rest of us made less at the end of the month because the money went to Exxon. Is there any connection between that fact and the Presence of an Oil man in the White House/ How about a vice President that headed up the very company that profited the most from the Iraq war? Is this so boring that MSM should be ignoring it just because nobody seems to want to anything about it?
4. By 2009, 1 person in 10 will be on food stamps in the United States. Shouldn’t that be interesting to both sides of the “Aisle?”
5. The average person in the United States is in debt on credit cards and other consumer and real estate loans in an amount that they can never repay, whereas no other modern country has that problem. Why?
6. Interest on debt accounts for more expenditure by government and individuals than anything else in the United States. Trillions of dollars of transfered wealth from those who now can’t eat to those who don’t know what to do with the money. What is being done about interests rates that guarantee non-payment and assure financial enslavement? (By the way medical care is second is now touted to be the “employer of last resort”).
7. Houses were appraised at $500,000 and within days were revealed to have values of less than 70% of that. People were prompted, tricked and coerced into signing mortgage documents they didn’t understand, in violation of law (not that anyone has been prosecuted), and now the borrowers are blamed for a scheme they still don’t understand. Now millions of American citizens are or will be broke, homeless and jobless. We know who did it and how it happened but MSM doesn’t care about that.
8. All of MSM (Main Street Media) is now controlled by a handful of people who let us hear only the things they want us to hear and only in the ways they want us to hear it. If you want news, go to the Internet, if you want infotainment watch TV or listen to radio. 
9. How many flag draped coffins can be hidden from view to keep the Iraq war “sanitary” and keep the public distanced from the gruesome reality of war, death, disfigurement, famine, disease and moral decrepitude? And why is MSM going along with  the ban on pictures of coffins? Isn’t the death of young loved members of families who made the ultimate sacrifice worth reporting?
10. How many veterans need to be homeless and wandering through the streets with head injuries before we think to ourselves “you know, there is something not quite right about this.”
11. We have outsourced the most sensitive manufacturing of top secret defense components to China which just happens to be the only real military threat to our national security. And we have financed their military expansion by encouraging their economic growth to the point where they now have a  stranglehold on our country — they own most of our debt, they manufacture most of our goods, they process most of our food, and they are the most prolific source of spying in the United States. Thus whatever they don’t get legally, they get illegally. 
12. MSM (main Street Media) has virtually eliminated their staff of reporters, because they get everything off the newswires and they make up the rest. Most of the time spent on “news” channels consists of opinions about gossip. Interesting, perhaps, but useless for those of us who would like to evaluate our options on voting on issues and candidates.
13. It is illegal to counterfeit money unless you are a foreign country (North Korea for example) or you are a Wall Street investment banking firm that creates money supply by calling them “derivatives, collateralized debt obligations” and such. Between North Korea’s supernote and and the $500 trillion (yes with a “T”) in derivatives, credit swaps etc. out there it can be no surprise that no government can control the effects on world monetary supply —- that has been outsourced to the private sector as well. 
14. MSM (Main Street Media) now presents us with pretty faces, some nice looking legs, a tempting bust line, and a teleprompter written by people who have not researched the validity of the reports in 10 years.
15. Prescription medications are “so dangerous” that you can’t get them without seeing a doctor, but they are advertised directly to consumers. Is this what we want our children to hear and see? You can get a Bud Lite or a Absolute martini without a doctor’s prescription and drink all you want. It’s only when you kill or main people with your driving or other physical abuse that you are held accountable. 
16. MSM (Main Stream Media) provides us with pundits and moderators who are undereducated, and inculcated with the sole core value of saying something that will increase the ratings and thus revenues of the media in which their comments appear. 
17. Prescription medications cost $20 per pill here and as little as $0.50 in other countries easily accessible from the U.S.
18. The total expenditures for medical care, drugs, products and associated services is around 2-3 times the amount spent by any other country or group of countries. The average U.S. Citizen is in constant danger of dying for lack of medical care because he/she is probably not covered entirely for the medical event, because he/she was never given a preventative regimen that is regularly followed in other countries, or because they are simply barred from access to medical system. 
19. Despite the amount we spend per person, we get less care, and suffer from shorter longevity, higher infant mortality, shorter height, than at least a dozen other countries and sometimes as high as 40 other countries depending upon which metric you are interested in. To say we lost our “lead” is not the point. 
20. The average person educated in the U.S. has slipped from 1st in world ranking to around 20th. Does that bother anyone?
21. Bullying has spread through every school, public and private and is spreading into the marketplace. Hello? Anyone there?
22. We have lost our way. We worship money in all its forms more than we worship God. Every day we perform acts that involve our worship, use and belief in money. Most of us spend at best one day per week for a couple hours worshipping God.
23. MSM (Main Street Media) thrives on conflict over minutia (bullets in Bosnia, a flag pin probably made with lead in China, and statements of “associates” that are made into controversial “positions”) rather than actual issues and characteristics about the candidates themselves. We allow this by talking about that the pundits tell us to talk about. And what we talk about causes us to vote against our own interests.  
24. When we tried importing from China and India the prescription drugs at a fraction of the cost that the drug companies were charging us, the government stepped in and said it was unsafe and  could result in tainted drugs. Now the drug companies have eliminated American jobs and outsourced the manufacture of the drugs to where? — India and China — and we have what — tainted, deadly drugs of dubious value to begin with and with side effects that include anal leakage and death. 
25. How many times do we need to hear that pharmaceutical companies spend $5,000 on every man or woman doctor in the U.S. to push their stuff before we make THAT an issue?
26. The war on drugs is making a fortune for people on both sides of the law, including the privatization of prisons and huge profits from private ownership of prisons, 75% of the inmates of which are there because of minor drug charges. There is no war on drug use and there is no war on drug supply. That is why we have drugs in America.
27. How many times do we need to be disappointed in a politician, whom we knew was taking money from the medical- pharma complex, insurance companies, oil companies and credit card companies? What makes us vote for these people?
28. Where is MSM “keeping them honest” by reporting discrepancies between promises and action?
29. How many dogs need to die before we accept that they are the canary in the mine shaft and that the rest of us are just as much at risk because the tainted, poisoned food is all coming from the same place now?

I could go on, but I invite you to add your own comments to the list. And while you are at it, why not answer this question: What specifically are you going to say to your friends and family about these issues and how will you vote?

Memo to all Senators, Congressmen and state legislators:

The solution proposed by Barney Frank for the Mortgage Meltdown is dead-on right. Suck it up.

The disaster that awaits will fall on your record unless EVERYONE gets something they can go home with. Any lender that opposes this is arguing for their own disaster. This program will save their balance sheet, increase their reserves for lending, and save their income statement as well. They could even recover prior write-downs if Frank’s plan is expanded to the full 4 million homes affected. See my blog as livinglies.wordpress.com for more details.

The bottom line is that we MUST keep everyone in those homes, maintaining them and paying utilities, and paying something toward the mortgage. Allowing the lenders to participate on the upside allows them to recover their losses, but also, if the disclosure rules are relaxed, they will be able to delay writing off mortgages and investments that otherwise will come cascading this year and next.

If we can, where the home is empty and still inhabitable, we should reverse the foreclosures and reinstate the loans, reinstate the CDO/CMO investment etc. Of course those homes that have stripped of appliances, wiring and plumbing are another story. Pelosi’s support of this is critically important to passage. 

• Most people agree that we can’t correct the problems that are still unfolding unless we admit the severity of the problem. The current estimates of a maximum of $450 billion damage are absolute lies designed to give reassurance to people who could and probably should cut and run. As long as we deny what is really happening, the real solutions will not emerge. The current group of proposals can be be all logged in under one word : patchwork. 
• The real solution is comprehensive political action together with regulatory reform that goes in an entirely different direction than allowing money to be controlled more by political force of individuals in power with their own private agendas.
• Here is a one page summary of the measurements of the actual damages caused by the sub-prime mortgage crisis, coupled with the effect of the sub-prime mortgage crisis on all mortgages and housing, coupled with the effect on inflation and private losses rippling out from the collapse of liquidity, credit, jobs, and social services. Some fo this information was taken from the BBC News Website.
• Mortgage Meltdown: The real measurements and statistics 

• Senator Obama is correct when he states that the politics of division has caused us to look suspiciously at each other when we should be looking at predatory corporations stealing our wealth while government either looks the other way or lends a helping hand.  
• Here is the article: 
• Report Takes Aim at Mortgage Lender’s Auditor

By VIKAS BAJAJ

Published: March 26, 2008

In a sweeping indictment of one of the nation’s largest accounting firms, an investigator released a report on Wednesday that said “improper and imprudent practices” by a once high-flying mortgage company were condoned and enabled by its auditors.

Related

Text of the Report (pdf)

KPMG, one of the Big Four accounting firms, endorsed a move by New Century Financial, a failed mortgage company, to change its accounting practices in a way that allowed the company to report profits, rather than losses, at the height of the housing boom, an independent report commissioned by a division of the Justice Department concluded.

The report is the most comprehensive and damning document that has been released about the failings of a mortgage business. Some of its accusations echo charges that surfaced during the collapse of Enron, the energy giant, which collapsed in accounting fraud more than six years ago.

The scathing 580-page report documents how New Century lowered its reserves for loans that investors were forcing it to buy back even as such repurchases were surging. Had it not changed its accounting, the company would have reported a loss rather a profit in the second half of 2006.

The profit was important because it allowed executives at the company to earn bonuses and allay concerns that the company was healthy when in fact its business was coming apart, the report contends.

The report is the result of a five-month investigation by Michael J. Missal, a lawyer and former official at the Securities and Exchange Commission hired by the United States Trustee overseeing the New Century bankruptcy. It may allow New Century, which is in bankrutpcy, to sue KPMG.